TriOptima and SwapClear include first client-cleared trades in triReduce swap compression cycle

PUBLISHED BY:
Bryony Scragg

DATE:
2016-10-24

TriOptima, a leading provider of OTC derivatives post-trade risk management services and infrastructure, announces today that the first client-cleared trades were included in the most recent SwapClear compression cycle for Canadian Dollar (CAD) interest rate swaps. The entire CAD cycle had 18 participants who eliminated $1.38 trillion CAD (US$ 1.05) in notional principal.

London, New York – 24 October 2016 – TriOptima, a leading provider of OTC derivatives post-trade risk management services and infrastructure, announces today that the first client-cleared trades were included in the most recent SwapClear compression cycle for Canadian Dollar (CAD) interest rate swaps. The entire CAD cycle had 18 participants who eliminated $1.38 trillion CAD (US$ 1.05) in notional principal.

Client-cleared trades are trades that a Clearing Broker or Futures Commission Merchant (FCM) clears on behalf of market participants who are not direct members of a CCP. Citi, for example, is one of the first clearing brokers to offer the service to its clients. Until now only direct members of SwapClear could compress trades using the multilateral, risk-constrained triReduce service.

Including client-cleared trades in all future SwapClear triReduce compression cycles expands the participant base and liquidity pool, increasing compression efficiency. In 2015 SwapClear offered 45 triReduce multilateral, risk-constrained compression cycles. Hedge funds, asset managers and other financial firms, such as Citadel, will now have access through their FCMs or Clearing Brokers to the benefits of multilateral compression.

“We are pleased to participate in the inaugural triReduce cycle and to see TriOptima’s portfolio compression solutions become available to more market participants,” said John Naud, COO of Global Fixed Income for Citadel. “We have long supported buy side access to these solutions and look forward to the benefits that this will bring to the market.”

“Citi is happy to participate in the first triReduce cycle offered to our clearing clients,” said Christopher Perkins, Global Head of OTC Clearing at Citi. “Notional optimization and compression are paramount in today’s capital environment, and this capability will help contribute to a safer, more efficient marketplace.”

Cameron Goh, Global Head of Product and Service, Rates and FX Derivatives, LCH said: ”This enhancement means that our clients now have even more opportunities to compress trades by accessing SwapClear’s large pool of OTC liquidity. We continue to see strong demand for compression services, and our buy-side clients are particularly keen on using these tools to maximize their operational efficiency. We’re pleased with the results of this first compression cycle, and look forward to further reducing the total notional outstanding through our work with TriOptima.”

“Including client-cleared trades increases the participant base in triReduce cycles and generates larger pools of eligible trades for compression, improving cycle efficiency and results for all participants,” said Peter Weibel, CEO of triReduce. “This also expands the benefits of risk, capital and operational cost reductions to a substantial new segment of market participants.”

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As the world's leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals. The company offers futures and options on futures trading through the CME Globex® platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform. In addition, it operates one of the world's leading central counterparty clearing providers, CME Clearing. With a range of pre- and post-trade products and services underpinning the entire lifecycle of a trade, CME Group also offers optimization and reconciliation services through TriOptima, and trade processing services through Traiana.

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